What happens when you give money to the rich
by Gaius Publius on 7/17/2010 02:30:00 PM
They keep it and you never get it back. These charts tell the tale, from Paul Krugman recently. The first chart shows lost revenue from the Bush tax cuts:
[A]s for revenue: we have a growing economy, which means that revenue tends, other things equal, to rise over time. But here’s what real federal revenue looked like since 1992:
Rapid, steady growth in the Clinton years; much less thereafter, even if you stop the clock just before the housing bubble burst [i.e., at the peak in 2008].
The first eight years are Clinton's revenue. The next eight are Bush's. Measure Bush to the second peak - the start of the economic crisis. Heck of a job, George.
The second chart is even worse - for the argument that tax cuts pay for themselves. It shows the effect of the Reagan tax cut.
The blue line is real federal revenue. The red line is the revenue trend starting at the first Reagan tax cut. Notice that the blue line never again catches up to the red one - contrary to conservative promises that it would. That's lost revenue for every year after:
Here’s real federal revenue, in 2005 dollars, from 1970 to 1990. I’ve plotted the log, because it’s easier to look at trends:
First, the Carter years, contrary to legend, were not a period of economic stagnation and falling revenue . . . [O]verall growth was respectable and revenue growth reasonably high.
Second, the revenue track under Reagan looks a lot like the track under Bush: a drop in revenues, then a resumption of growth, but no return to the previous trend.
This is exactly what you would expect to see if supply-side economics were just plain wrong[.]
This is just for fun, of course, an exercise on a mint-julip day. They're lying, those conservatives, when they talk about the goodness of tax cuts, and they know it. It's our job to also know they're lying - and to act like it.
When you give money to the rich, they keep it and never give it back. It's one way you get to be rich.
GP